The Economy

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Re: The Economy

Postby kg » 30 Aug 2010, 16:53

AJRC wrote:In the north east our economy used to be like yours, mainly coal mining. But Thatcher's conservative government destroyed the coal mining industry so at the minute we're struggling. A huge steel manufacturer went under recently meaning 1500 people lost their jobs. In a region already under pressure this has been devastating.


My area is experiencing similar problems. The most recent; a very long standing company is about to substantially leave the area and move operations elsewhere...Olin Corporation is considering moving the vast majority of its operations here to Mississippi. Olin has had a presence here since before WW1. At the beginning of his work career my father got a job there for a time, to support his college education.

From http://en.wikipedia.org/wiki/Franklin_W._Olin:

After graduating with the class of 1886, he worked in several jobs before founding a blasting powder mill construction business; his first opened in East Alton, Illinois in 1892.

He formed the Western Cartridge Company in 1898 to manufacture ammunition, and during World War I diversified into brassmaking for use in cartridge shells. In 1931 Olin acquired the Winchester Repeating Arms Company. After World War II, Frank Olin retired from management of the firm, leaving it to his sons John and Spencer.


I knew that Olin Brass had been around for a while, but I had no idea! That's OK, though...there's precedence. The Duncan Foundry in downtown Alton was founded in 1892. It closed down a few years back after being in operation during both world wars. While it didn't lose the area as many jobs as Olin potentially will, it was still a bit of a blow, specifically to the Alton area. There have been several more, and Madison County is above 10% unemployment.

AJRC wrote:Business is picking up, slowly but surely. But gone are the days of unlimited spending, everyone is tightening their belts. Maybe they think the worst is yet to come? :hide:


That's what I'm perceiving. The housing market has taken a major downturn along with other business and industry in this country as people "tighten their belts." Hopefully, the "avalanche" won't be too bad, but I still think we're in for a bit more of a rough ride, economically speaking.

BTW, I'm going to put in an application to join our local Optimist and Glee Club. Anyone want to join me?

:lmao4:
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Re: The Economy

Postby AJRC » 31 Aug 2010, 14:33

House prices here are going up, very slowly. They went up by 0.4% in July. But the Land Registry has said the prices have reached a plateau and will now start falling. First time buyers are being put off by the 20% deposit you have to pay to get a mortgage these days, the amount of first time buyers is at record lows.

Now we see that anyone who bought a house at the peak of the economy just before it crashed has been told they will have to suffer four years of negative equity, basically four years of the house being worth less than they bought it for. I know the feeling, i stupidly invested in property in Miami when our economy was fine and Dubya's economy had failed. Everything was great until our economy failed as well, then it took me three years to sell it and i only just broke even early this year.

We're not out of the woods yet, not by a long shot.
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Re: The Economy

Postby AJRC » 21 Oct 2010, 13:01

Well here in the UK the new conservative government has finally delivered its spending review, and as expected it's full of massive cuts to the public sector. The cuts are to be made over the next five years and in total come to £81 billion. They claim that they're attacking bureaucracy and that frontline services such as the NHS and public transport wont be affected, but this is a conservative government so i'll believe it when i see it.

Each local Council will see a 7.1% annual fall in their budgets, so how NHS or other frontline services won't be affected is beyond me.

We're in for a tough five years, the conservatives are going to have to pull out all the stops to get re-elected in 2015.

In one good move the government has announced a bank levy that will raise £2.5bn a year. Some banks are horrified at being taxed but the same banks are still giving management huge bonuses even after the financial meltdown. I think the tax isn't tough enough, it's almost like the banks couldn't care less and think they can do what they want, which is essentially what has happened over the last decade. This levy is meant to encourage banks to take fewer funding risks, whether it will or not remains to be seen. Can't see how it will though as the banks will just get the public to bail them out again if they screw up. :roll:
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Re: The Economy

Postby van » 21 Oct 2010, 16:27

Kia ora Andy

Been a long time since I posted here. It is not that I have changed my mind about the economic situation/outlook but see little point in flogging a dead horse. ;) Your problems are mirrored here, our health system is a shambles and the chickens are coming home to roost in respects the education system.
A recent poll of University graduates shows that 70% are disillusioned with any advantages that such an education has brought them, and given the chance to do it again would seek another vocation. Likewise the doing away with the apprenticeship scheme some decades ago also means that with the earthquake in Ch-ch there is a dearth of qualified trades people to effect repairs.
The Unions are starting to flex their muscles again 3 decades after having been emasculated by the Corp-Govt and all in all I think we are all in for a rough ride. More Power to the People I say, but then again, current legislation will see the cops armed to the teeth while the firepower of the people has been severely curtailed. The irony is that those convinced that the Nanny State knows best appear to be all in favour of an impending Police State as it makes them feel 'safer'! :( This mindset, to my way of thinking is akin to suggesting that Afghanistan, Pakistan et al are safest countries on Earth, Yeah Right! :?
"What we sow we must also reap"

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Re: The Economy

Postby AJRC » 22 Oct 2010, 11:17

It's the same here, students leave Uni knowing that their degree no longer guarantees them employment. And the government has now given the Universities the power to charge whatever tuition fee they want. Some students are saying they'll leave Uni massively in debt with no way of paying it back. It's a sad world we're leaving for our kids. :(
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Re: The Economy

Postby van » 26 Nov 2010, 17:28

Kia ora Andy

I listened to an interesting interview on the Radio recently. Neville Bennett a prof of Economic History? was asked about the impact on Society that Economic Inequality has. It confirms many of the things I have seen changed over the yrs. I'll post the link, if you are interested in listening to it. It takes about 20 min, I did it the hard way with dial up and the flow of conversation was somewhat distracting due to the buffering effect. I was unable to download the file, but perhaps on broadband it maybe easier to listen to.
http://www.radionz.co.nz/audio/national ... _economics


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Re: The Economy

Postby AJRC » 30 Nov 2010, 03:02

Wow, his voice is so boring. I listened for about 10 mins then nearly fell asleep. ;)

It's been said many times that the spread of any economy is always biased towards the elite. I didn't know New Zealand had such a problem though.

I've seen it here in the UK and around the world, anywhere where capitalism holds sway basically, the wealthy being taxed less than the working class. I know the percentage of corporate tax i pay, and it's still way too high. I've seen bigger companies than mine go under over the last few years. But large corporations only have to pay 28% of their profits in tax, so the more money you earn the less tax you pay. It's a sad fact of capitalism but a true one.

It's the same with individuals. The working class has to pay about 25% of their income in tax where as the rich have to pay 40%. The rich should have to pay much, much more. At the moment the lowest paid workers pay a massively greater proportion of their income in tax than the rich.

It's a sad world we live in where the rich just keep getting richer and the poor just keep getting poorer. Karl Marx did try to warn us, but greed deafened our ears. :(

On a even gloomier note you've obviously heard about the Irish bailout, our economy is going to get another kick in the teeth because of it. They really need to review the Euro now, something must change.
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Re: The Economy

Postby van » 30 Nov 2010, 17:42

Kia ora Andy

Wow, his voice is so boring. I listened for about 10 mins then nearly fell asleep

I was in bed reading when the interview started, and while I can see your point the material is what had me listen. Unfortunately, I did not fully hear all of it, hence my search for the transcript?
On a even gloomier note you've obviously heard about the Irish bailout, our economy is going to get another kick in the teeth because of it. They really need to review the Euro now, something must change.

Yes, it doesn't look well. Conversely, even tho I did not read it, I came across a headline (or a comment) that since Iceland bailed out from the Euro they have made remarkable progress. Having said the above, I thought I'd better check it out :mrgreen:
http://abcnews.go.com/Business/wireStory?id=12145245
Mind you, with the IMF having a hand in it I am not so sure that meaningful gains will be achieved in the long term, given IMF's Historical past. ;)

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Re: The Economy

Postby AJRC » 01 Dec 2010, 05:53

You have to remember the bailout was a loan, Iceland still have to pay that back. Because they owe the money to foreign creditors they're going to have to put aside huge portions of their national budgets to pay them back. That means less money for the local governments so less money for the Icelandic people. Their economy is stable, but it won't see any meaningful growth for a long time.

Ireland could go the same way, the IMF has it in it's back pocket now. The only other way is for Ireland to wait to see what happens to the Euro.
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Re: The Economy

Postby van » 03 Dec 2010, 19:37

Kia ora Andy

I see that Spain is in the sights of the IMF as well as it is being pressured to sell of its infrastructure. Any financial benefits will be shortlived and its future outlook will be bleak in the long term. I have seen it here and in other places. Incidentally, I saw a similar scenario developing with Vietnam today.

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Re: The Economy

Postby AJRC » 06 Dec 2010, 06:24

Yeah, Spain and Portugal are in trouble. Both have raised taxes but could still ask for bailouts. It's looking grim at the moment, i think the UK's decision to stay out of the Euro is looking like the best move our government has made in a long time.

The price of oil is going through the roof again.
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Re: The Economy

Postby van » 10 Mar 2011, 16:05

Kia ora

It has been some time since anyone has posted here, what with other things happening all around the World.
However I came across the following article which has me wondering ,if combined with the increasing price of oil and the abandonment of Govt Bonds, we could be in for a rocky ride in the months ahead?
http://theeconomiccollapseblog.com/arch ... sury-bonds

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Re: The Economy

Postby AJRC » 11 Mar 2011, 10:17

Look at my last post, thinking Spain might need a bailout. Well they did, a huge one. And since Spain went t*ts up so has Ireland.

It's not really a surprise that the economy isn't as good as some think it is. After 8 years of GOP rule the nation of America is close to bankrupt. And now the world's largest bond mutual fund is selling all of it's U.S. government bonds. Citing the low interest rates as the reason.

This is coming on the back of news that the Federal Reserve is to sell a record amount of government debt.

PIMCO says they will only buy back the bonds if the government raises interest rates on U.S. bonds. But the only problem with that is that normal interest rates will also go up, meaning that any product that is interest rate sensitive such as petrol (gas) will skyrocket.

We shall see in a few months if this has any effect. Some are saying this might actually help and that PIMCO have got it totally wrong.
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Re: The Economy

Postby AJRC » 27 Apr 2011, 07:40

Hold on to your hats folks, the UK economy just grew by a whole 0.5% in the first three months of 2011. :dancer2:

This is still shit. Inflation is getting out of hand, and lending is still at an all time low. People just don't have any money, so a 0.5% increase in our economy means absolutely nothing to the person on the street.
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Re: The Economy

Postby kg » 27 Apr 2011, 11:20


Happy Days are here again!! I'm going out and buy a mansion, a yacht, and a Ferrari on credit with all the wealth that's soon to be rolling my way! I know Citibank will be more than happy to extend me the credit. :roll:

AJRC wrote:This is still shit. Inflation is getting out of hand, and lending is still at an all time low. People just don't have any money, so a 0.5% increase in our economy means absolutely nothing to the person on the street.


Nor does it here.

Though not quite in this way, I have said it before and I'll say it again...this is not a "Recovery"...it is a correction in the overall market. It has been proven over and over again using technical charting of market values; in a downward (Bear Market) trend, there will be corrections where the trend will trend upward for a bit, before continuing it's general trend.

This also happened just after the stock market crash of 1929. The crash of 1929 happened, then there was a rebound before the big downturn, as you can see below:

[ img ]

We can only hope that this doesn't happen (or that it's not as desperately bad), but I'm of little faith. Technical charting has proven itself time and time again. Here's a little comparison between the crash of 1929 and the crash of 2008 for your amusement and horror:

[ img ]

The above is from December of 2008. Compare it to the chart on top and you can see that we're near the peak of the correction (classic "head and shoulders", and we're on the right shoulder), though it has extended a few months. If Technical Charting proves itself out, you see where we're heading.

Fasten your seat belt...it's going to be a bumpy ride!
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Re: The Economy

Postby AJRC » 27 Apr 2011, 11:24

The only way is down. :(
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Re: The Economy

Postby kg » 27 Apr 2011, 11:47


Just for giggles ( :roll: ) here's a chart of the S&P from the late 1950s to present. As I've said, we're on the right shoulder, and as anyone who knows Technical Charting can tell you, once on the downward slope of that right shoulder, there's one way it's going to go:

[ img ]

As an aside...very rarely is the "head and shoulders" completely symmetrical. Very often the right shoulder is smaller than the left. Just thought I'd throw that out there.
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Re: The Economy

Postby AJRC » 28 Apr 2011, 06:51

There seem to have been a lot of recessions when conservatives were in power, coincidence?
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Re: The Economy

Postby kg » 28 Apr 2011, 08:11


Ehhhh...could be! :shrug:

I sure do miss oldmd's intelligent input into this subject, but in a way, I'm glad she's not witnessing these days.
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Re: The Economy

Postby van » 30 Apr 2011, 04:20

Kia ora

I concur with Glenn's comments. We are not out of the woods and the bloody birds have picked up the crumbs we left behind to mark our trail! At my time of life, I have gotten to the stage where I don't give a flying f@#$%^!
In many respects I am reminded of the title of a book:"Foul Play at the Crossroads" by Elizar Down ie we're F!@#$%^! Time and again the Peasants have put their trust in the Institution which is neither deserving of Trust nor has our Interests at heart! Politics is a Pox for which, like Religion, no Vaccine has yet been devised!
See what happens when the demon drink makes me salivate?
I owe that one to Maureen! Been drinking her Tawny Port! :dancer2:

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